Blue Mass Group

Reality-based commentary on politics.

Investing in the future

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Back when he was a university professor, Federal Reserve Chairman Ben Bernanke specialized in studying the causes of the Great Depression. Now, he has his hands full trying to prevent a second one. Today, Bernanke told the House Budget Committee that the time is right for the government to stimulate the economy.  House Democrats and experts like Nobel winner Paul Krugman have been saying the same thing for a while.

They are right. This time, however, instead of rebate checks, the money should be spent in ways that will have strong multiplier effects. It’s about food stamps, and heating assistance. It’s about infrastructure, like long-overdue transit projects like the Green Line to Somerville and high-speed rail to Springfield, and yes, fixing roads. And it’s about critical services provided by government and the nonprofit sector — youth centers, housing for the homeless, health care, services for the mentally ill.

If a $300 billion stimulus plan was spent in all 50 states in proportion to our population, that would be $6.2 billion for Massachusetts. Let’s make an investment in our future.

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Comments

  1. … are necessary to get infrastructure projects going.

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    p>Ezra:

    Via Kay Steiger, this McClatchy article detailing the nation’s infraastructure woes makes a good point Earmarks get a lot of flack in American politics, but one of the purposes they serve is wresting money for infrastructure repairs in a country that doesn’t have a more sensilbe or coherent infrastructure strategy. That’s why so many road and highway projects are actually funded as earmarks: They have nowhere else to go. That’s why something like the National Infrastructure Bank — which Chris Dodd and Chuck Hagel introduced, and which Barack Obama supports — would actually be a more useful, and certainly more sensible, way of addressing “pork.” So long as earmarks fill a pressing need in American public policy, they’re not going anywhere. But if you can start robbing them of their legitimate side, you can do more to isolate and eliminate the simply wasteful measures they abet.

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    p>If you’re going to stimulate the economy by way of infrastructure projects, then earmarks aren’t necessarily evil… to say nothing of not doing a spending freeze.

  2. The last stimulus package amounted to little more than a transfer of money from the Treasury to the credit card companies – very little economic stimulus was actually accomplished.  There are better ways to go than rebate checks, and here’s a great one I saw at DKos:

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    p>Issue rebate checks to everyone who gets their car tuned up – you have to turn in the receipts to get the rebate.  If every car in the country got a tune-up, we’d use 5% less gas every day, factory orders would be stimulated, and local mechanics and auto parts stores would have money in their pockets which they would spend, stimulating the economy further.

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    p>Taking it a step further, the government could rebate all manner of energy conservation efforts.  Insulation already has a tax rebate, but there’s lots of everyday items that would benefit from being replaced with newer, energy efficient models:  refrigerators, air conditioners and other appliances, even replacing all your incandescent bulbs with CFL or LED lighting.

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